Dynamics: A Three Country

bagimpertinentUrban and Civil

Nov 16, 2013 (3 years and 4 months ago)

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Retail Market Structure and
Dynamics: A Three Country
Comparison of Japan, the U.K.
and the U.S.

Jonathan Haskel, Ron Jarmin,


Kazu Motohashi and Raffaella Sadun

Motivation


Different aggregate economic performance
across countries is driven by productivity growth


Productivity growth is a function not of not only
technology and other shocks, but how firms and
markets respond to these shocks.


Recent literature stresses the role of firm and
establishment turnover in reallocating resources
from less to more efficient producers
-
FHK
forthcoming, Haskel and Sadun (2005) and
Matsuura and Motohashi(2005)

Motivation (cont.)


Thus, the ability of markets to reallocate
resources is crucially important to the
productivity growth and improved living
standards

Focus on Retail


The Retail sector has experienced rapid
productivity growth in recent years,
especially in the U.S. (do we have some
OECD numbers we could cite here Basu
et. al show big acceleration in US post 95
but deceleration in UK what about
Japan…we know Japan has much lower
productivity levels)

Our Contribution


We seek to compare the structure and
dynamics of the retail sectors in Japan, the
UK and the US


We want to see if differences in market
dynamics impact the rate of resource
reallocation and in turn productivity growth

Data


Maybe a table with countries across the top and
data attributes down the side


Attributes would include


Universe

yes/no


Source


census/survey/admin records/combo


Primary unit


estab/local unit


Other units


firm/tax entity


Frequency


Longitudinal linkage method


tax id/survey id/long
id/name and address/combo


Classification


industry/location/firm type


Key variables


sales/emp/etc

Structure of the Retail Sector

Japan
U.S.
UK
Number of Establs
1,273,904
1,114,637
286,175
Estabs per 1000 pop.
10.03
3.94
4.78
Number of Firms
717,553
214,930
Single Unit Estabs
839,993
685,044
190,288
Multi Unit Estabs
326,167
429,593
95,887
Employment
7,146,228
14,647,675
2,663,331
avg emp estabs
6.13
13.14
9.31
avg emp firms
20.41
12.39
Cross Section table for reference year = 2002
Structure Cont.

Year
Japan
U.S.
UK
1997
11.06
4.10
4.93
2002
10.03
3.94
4.78
Establishments Per 1000 Population
Size Distribution

SU
MU
SU
MU
SU
MU
10th percentile
1
1
0
3
1
2
25th percentile
2
3
1
5
1
4
median
2
6
3
9
2
7
75th percentile
4
11
7
18
4
14
90th percentile
7
22
14
54
7
32
SU
MU
SU
MU
SU
MU
10th percentile
190
1300
66
296
25th percentile
584
3311
162
613
median
1555
8202
404
1296
75th percentile
3950
20967
1034
3376
Turnover Size Distribution, reference year = 2002
Japan
US
UK
Employment Size Distribution, reference year = 2002
Japan
US
U.K.
Basic results on
Dynamics

Dynamics (counts)
Japan
US
UK
# of estabs year 1
1,393,274
1,118,447
289,960
# of estabs in both years (continuers)
946,790
653,198
160,869
# of estabs in year 1 but not year 2 (deaths)
446,484
456,132
129,091
# of establs in year 2 but not in year1 (births)
219,370
448,173
125,306
# of estabs in year 2
1,166,160
1,114,637
286,175
Dynamics (emp)
Japan
US
UK
emp of estabs year 1
6,990,366
13,991,103
2,411,739
emp of estabs in both years (continuers) year1
5,178,687
10,185,226
1,245,089
emp of estabs in both years (continuers) year2
5,334,342
10,446,173
1,328,314
emp of estabs in year 1 but not year 2 (deaths)
2,030,972
3,750,898
1,166,650
emp of establs in year 2 but not in year1 (births)
1,811,679
4,007,555
1,335,017
emp of estabs in year 2
7,365,314
14,647,675
2,663,331
More on basic dynamics

Avg emp Size
Japan
US
UK
emp of estabs year 1
5.02
12.51
8.32
emp of estabs in both years (continuers) year1
5.47
15.59
7.74
emp of estabs in both years (continuers) year2
5.63
22.90
10.29
emp of estabs in year 1 but not year 2 (deaths)
4.55
8.22
9.04
emp of establs in year 2 but not in year1 (births)
8.26
8.94
10.65
emp of estabs in year 2
6.32
13.14
9.31
More systematic approach to
comparing the dynamics of the retail
sector across the three countries


We compare the cross sectional dispersion (standard
deviation) of establishment and firm growth rates.


We use the DHS growth rate measure which permits
entry and exit:


)
2
/
)
((
)
(
s
it
it
s
it
it
it
x
x
x
x






Cross Sectional Dispersion in firm
and establishment growth rates


Cell based approach


Establishment and Firm micro data for the
three countries are confidential and can’t
leave statistical offices


We compute comparable statistics based on
the micro data for pre
-
defined cells.


Mean and standard deviation of establishment and
firm employment growth rates (
γ
)

All
Establishments
All Firms
Continuing
Establishments
Continuing
firms
1.265
1.452
0.488
0.604
0.075
0.046
0.032
0.033
0.029
-0.179
-0.03
0.049
0.017
0.019
0.007
0.014
0.342
0.217
0.007
-0.122
0.047
0.046
0.024
0.042
0.165
0.122
0.02
0.006
0.031
0.027
0.014
0.022
0.168
0.049
0.051
-0.025
0.029
0.025
0.012
0.019
0.153
0.037
0.07
-0.056
0.026
0.022
0.011
0.016
25<=avgemp<50
0.117
0.039
0.067
-0.047
0.028
0.023
0.012
0.017
50<=avgemp<75
0.056
-0.0002
0.048
-0.073
0.032
0.028
0.013
0.02
75<=avgemp<100
0.056
-0.002
0.034
-0.075
0.036
0.033
0.015
0.024
100<=avgemp
-0.907
NA
-0.246
NA
0.019
NA
0.008
NA
0.245
-0.061
-0.047
-0.078
0.02
0.012
0.011
0.009
351
279
333
260
yes
yes
yes
yes
3 Digit ISIC Controls
Size Class
Observations
5<=avgemp<10
10<=avgemp<25
Japan
avgemp<2
2<=avgemp<5
UK
US
Cross Sectional Dispersion Regression
(Dependent Variable: std dev of employment growth)
Model
Intercept
Multi-Unit
How does this reallocation affect
the composition and structure of
the retail sectors of the three
countries?


Does churning result in changing market
shares?


Or is it limited to only the smallest units?


We examine transitions between size
class quintiles

Impact of retail sector dynamics on
market structure

Deaths
1
2
3
4
5
1997 total
Births
0.00%
10.99%
4.50%
3.09%
2.94%
2.61%
24.13%
1
10.08%
8.09%
1.31%
0.91%
0.74%
0.30%
21.42%
2
6.81%
2.20%
4.74%
1.75%
1.28%
0.43%
17.21%
3
3.91%
0.66%
1.09%
3.19%
2.60%
0.73%
12.17%
4
3.40%
0.38%
0.63%
1.48%
3.88%
1.64%
11.41%
5
3.91%
0.19%
0.21%
0.45%
1.53%
7.37%
13.66%
2002 Total
28.11%
22.50%
12.48%
10.87%
12.96%
13.07%
100.00%
Deaths
1
2
3
4
5
1997 total
Births
0.00%
8.55%
7.16%
6.34%
5.61%
4.55%
32.21%
1
9.45%
2.48%
0.99%
0.34%
0.16%
0.06%
13.49%
2
7.36%
1.31%
3.19%
1.27%
0.33%
0.10%
13.56%
3
6.30%
0.50%
1.49%
3.67%
1.44%
0.22%
13.62%
4
5.54%
0.25%
0.37%
1.42%
4.56%
1.42%
13.56%
5
5.01%
0.10%
0.12%
0.24%
1.17%
6.94%
13.57%
2002 Total
33.65%
13.19%
13.34%
13.27%
13.28%
13.28%
100.00%
1997 Size
(based on
sales)
Quintile
2002 Size (based on sales) Quintile
Firm Size Class Transition Matrices
U.K.
2002 Size (based on employment) Quintile
1998 Size
(based on
employment)
Quintile
U.S.
% of Firms
Impact of retail sector dynamics on
market structure

Deaths
1
2
3
4
5
1997 total
Births

2.33%
2.09%
2.33%
2.89%
3.97%
13.60%
1
7.39%
8.30%
1.12%
0.29%
0.13%
0.08%
17.31%
2
5.54%
3.20%
6.95%
1.24%
0.25%
0.10%
17.27%
3
5.01%
0.51%
3.68%
6.87%
1.08%
0.18%
17.34%
4
4.89%
0.16%
0.44%
3.64%
7.23%
0.91%
17.27%
5
4.86%
0.04%
0.11%
0.25%
2.72%
9.23%
17.20%
2002 Total
27.69%
14.54%
14.39%
14.63%
14.29%
14.46%
100.00%
Deaths
1
2
3
4
5
1997 total
Births
0.00%
8.30%
6.32%
5.36%
4.63%
4.16%
28.78%
1
9.27%
3.30%
1.06%
0.32%
0.15%
0.07%
14.18%
2
6.61%
1.66%
4.22%
1.34%
0.35%
0.11%
14.29%
3
5.19%
0.51%
1.99%
4.79%
1.54%
0.24%
14.25%
4
4.37%
0.24%
0.43%
2.05%
5.79%
1.38%
14.26%
5
3.85%
0.10%
0.13%
0.29%
1.69%
8.18%
14.25%
2002 Total
29.29%
14.10%
14.15%
14.17%
14.15%
14.15%
100.00%
1997 Size
(based on
sales)
Quintile
U.S.
2002 Size (based on sales) Quintile
1997 Size
(based on
sales)
Quintile
Establishment Size Class Transition Matrices
% of Establishments
Japan
2002 Size (based on sales) Quintile
Impact of retail sector dynamics on
employment growth

Deaths
1
2
3
4
5
1997 total
Births
0
40,924
30,496
28,513
44,228
468,148
612,309
1
-33,895
855
4,539
5,103
7,965
8,235
-7,198
2
-46,503
-3,258
-134
5,725
10,686
10,166
-23,318
3
-39,209
-3,276
-3,731
-1,658
9,374
16,386
-22,114
4
-52,095
-3,713
-4,598
-6,370
-983
22,465
-45,294
5
-654,502
-5,128
-5,246
-8,854
-19,688
401,612
-291,806
2002 Total
-826,204
26,404
21,326
22,459
51,582
927,012
222,579
Deaths
1
2
3
4
5
1997 total
Births
0
99,991
183,998
263,666
407,240
1,288,299
2,243,194
1
-151,718
347
12,221
10,187
8,246
6,894
-113,823
2
-215,932
-11,144
2,430
18,802
14,793
14,301
-176,750
3
-295,697
-11,678
-12,921
7,777
33,658
21,823
-257,038
4
-466,117
-12,374
-12,254
-19,047
19,583
86,002
-404,207
5
-2,462,301
-14,390
-17,518
-21,803
-60,297
1,802,537
-773,772
2002 Total
-3,591,765
50,752
155,956
259,582
423,223
3,219,856
517,604
1998 Size
(based on
employm
ent)
Quintile
U.S.
2002 Size (based on sales) Quintile
1997 Size
(based on
sales)
Quintile
Firm Size Class Transition Matrices
Change in Employment
U.K.
2002 Size (based on employment) Quintile
Impact of retail sector dynamics on
employment growth

Deaths
1
2
3
4
5
1997 total
Births
0
120,832
99,488
158,496
322,497
1,110,366
1,811,679
1
-200,924
-4,215
1,808
1,611
1,711
4,295
-195,714
2
-208,229
-8,604
-6,068
5,075
4,298
4,520
-209,008
3
-263,025
-3,053
-13,122
-746
13,972
9,225
-256,749
4
-417,177
-2,097
-4,694
-17,695
17,459
35,258
-388,946
5
-941,617
-1,764
-3,417
-5,961
-26,785
154,644
-824,900
2002 Total
-2,030,972
101,099
73,995
140,780
333,152
1,318,308
-63,638
Deaths
1
2
3
4
5
1997 total
Births
0
671,703
677,123
814,706
992,684
851,339
4,007,555
1
-853,580
19,819
2,232
23,518
52,309
50,045
-705,657
2
-766,508
12,517
-32,294
-91,755
-91,207
-34,539
-1,003,786
3
-734,345
28,110
52,534
-32,955
-92,830
-56,306
-835,792
4
-714,969
24,879
75,310
78,564
29,861
-66,598
-572,953
5
-681,496
11,987
48,673
71,363
106,445
71,265
-371,763
2002 Total
-3,750,898
769,015
823,578
863,441
997,262
815,206
517,604
1997 Size
(based on
sales)
Quintile
U.S.
2002 Size (based on sales) Quintile
1997 Size
(based on
sales)
Quintile
Establishment Size Class Transition Matrices
Change in Employment
Japan
2002 Size (based on sales) Quintile